In all industries there are conferences which the major players gather, and people discuss the future and hopefully some deals are made. In addition, if you are in the industry and want a job or examine the future the conferences are a great place to start. The conferences typically happen during the spring because in the northern half of the country, there was snow and ice. The spring is when the snow and ice melt, the weather gets warmer and outdoor activities resume in full. Every industry has multiple conventions but there tends to be a higher profile one.

In an article by Jeffery Jones of Reuters, the high profile convention for the oil and gas industry is called the CERAWeek by S&P Global in Houston, Texas. Legions of oil, gas and electricity executives are in the meeting halls of the convention. This year’s convention was seen as more important because of President Trump’s motto of Drill Baby Drill. To many of the industry it means, the lack of government regulations should mean greater freedom for the industry. What will they do with it?

In the AI data center boom, the demand for electricity is a good thing for the oil and gas industry because many of the data centers demand will be met with natural gas powering the power plants.

In addition, the LNG or liquefied natural gas plants to sell natural gas outside the US is in full operation mode.

US Energy Secretary Chris Wright was in the meetings and said he was honored to play a role in reversing what I believe has been very poor direction in energy policy. Secretary Wright was a former fracking executive, said that there was no way wind, solar and battery power could replace the many uses of natural gas which fuels 43% of US electricity. (one might notice in Trump 2.0 few are talking about increasing coal to make electricity, mainly because of the price differences).

Rystad Energy issued a report that highlights natural gas as immediate critical fuel for data centers which need almost 100% up-time. The inventory of planned US gas-generation projects has ballooned from 6 gigawatts to 17.4 gigawatts.

Longer term, the desire is to examine nuclear power, but the timelines to have functional nuclear power plants is much longer than natural gas plants.

Jeff Currie, chief strategy officer of energy pathways at Caryle and former commodities chief at Goldman Sachs, believes energy is in transition. In the 1970’s it was energy security, then climate became a driver. The security-driven energy transition moves faster than the climate one. The balance of energy is security over affordability over the environment. If they become out of balance you end up similar to Germany. The German shift has 59% renewable but the cost has been higher energy prices for consumers and businesses.

Linking to dividend paying stocks, the basic in all commodities is the balance over security -affordability – the environment. What do you want to pay and what are you willing to give up? There are fewer simple answers, in the past it was growth or not to grow and generally society picked growth. It is expected, society is more complex with many more voices to be heard and essentially every group does similar actions. Governments play a role in the short term to allow for a decision to be made but sales need to be made at a profit and those supply and demand curves you learnt in high school do not really change.

There are more questions than answers, till the next time – to raising questions